Is it possible for a high end manufacturer to overprice their goods?


Having just read the interesting and hyperbole laden review by RH of the new Rockport Orion speakers in the latest issue of The Absolute Sound, one thing struck me..

is it possible in the high end for a manufacturer to overprice their product ( doesn’t have to be a speaker, but this example comes to mind)? I ask this, as the Orion is priced at $133k! Yes,a price that would probably make 99% of hobbyists squirm. Yet, the speaker now joins a number of competitors that are in the $100k realm. 
To that, this particular speaker stands just 50.3” tall and is just 14.3” wide…with one 13” woofer, one 7” midrange and a 1.25” beryllium dome ( which these days is nothing special at all…and could potentially lead to the nasties of beryllium bite).

The question is…given this speakers design and parts, which may or may not be SOTA, is it possible that this is just another overpriced product that will not sell, or is it like others, correctly priced for its target market? Thoughts…

128x128daveyf

@mikhailark    This brings about my point in the OP.  Looking at my new copy of 'The Absolute Sound', there are many speaker manufacturer's who are now supplying speakers with pricing in the same league ( and many times much more) than a new Porsche!  The number of companies that are offering speakers in the range below even $10K is considerably less than those who are offering speakers for more than this figure, and many times --much more. Looking at the cable offerings, the same can be said about these folks. Some cables in the $70-$100K price points. ( Many mostly silver based, but anyone look at the price of raw silver recently!). IMHO, there are a lot of vendors who seem to believe that the high end is made up of primarily folks who say...'pass the Grey Poupon'.

@daveyf - this is the only way they can survive. Too few customers. Young folks buy $500 active system at Amazon and it sounds pretty good (facing my desktop active speakers with ribbons right now). Also, young generation is much better educated in computers and won’t buy $$$ ’Ethernet filters’.

There are more buyers of Porsche than speakers. So manufacturer calculates how many they can sell, then take expense, divide by production and get the price. Need 2 million a year to run the company, but can only sell 200 speakers? Well, $10K it is then.

My local high end gear shop has small room with "budget" gear (that's $10K+ items) and several rooms with $200K systems. People driving up in McLarens shop there now.

IMO, more interesting is used market. There you can see actual prices people are willing to pay. I am getting $10K MSRP speakers delivered tomorrow. I bought them for $3K basically like new.

And I bet 90% of buyers will put them in their expensive houses with glass floor to ceiling windows and zero acoustic treatment

@mikhailark, you make some very good points. I agree with what you say.

The most expensive system I ever heard in a private setting was housed in a multi million dollar room, all glass and overlooking the ocean. No acoustic treatments.

@fac

2000% is CRAZY..  Ive never met a single manufacturer that can get away with that.  There might be one product in their line that has a huge mark up because it's unique, some some one of kind invention,  but Im sure the rest of the company's line is in range with other product margins (typically 30%).  There is way too much competition to get away with ridiculous prices as the competitor is almost always willing to offer the same thing for less. 

 

The biggest driver of prices is the price of parts and metal work/cosmetics.  If you are small and can only afford to build say 50 of something in a year, your prices on those parts are very very expensive because you are buying in low quantity.  I learned this when I was complaining about the price of Jaguar parts.  I visited England and learned that Jaguar buys 50 sets of brakes at a time while Ford buys 100,000.  The jag brakes are 5X the money of the fords due to a small manufacturer having to set up to make just 50.  And since Jag never made a lot of money, got sold to Tata, you can see its not all that profitable to do.